The Tuesday Line: Casinos Hit Record Revenue; WSJ On Problem Gambling
Here’s today’s quick rundown in the world of US gambling.
AGA: Casinos hit $66 billion in ’23 revenue
The American Gaming Association released its report on revenue from commercial casinos in 2023, and the top-line number is $66.5 billion in revenue. That’s a record for a third straight year; more here. Not shockingly, the majority of the revenue comes from retail casinos. But online gambling (sports betting + casino) continues to contribute a more important part of the mix every year — now around $17 billion. Online gambling was barely a rounding error in the commercial industry not that long ago; now it’s roughly a quarter of revenue.
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WSJ dives into VIP + problem gambling
The recent topics du jour in the US have been problem gambling and VIP hospitality, especially in the wake of the dustup between DraftKings and Fanatics related to an executive. The latest from the Wall Street Journal gets into both topics, telling the story of a VIP with an online casino gambling problem. Story here (paywall). It was easy to dismiss some of the problem gambling stories written in the run-up to the Super Bowl as low-hanging fruit with little actual reporting done. I don’t think that’s a valid criticism of this piece, a well-told and -researched story by a reporter on the gambling beat. The story reads as a failure of the ecosystem. According to the story, at one point the gambler asks DraftKings if it can offer her a loan (huge red flag!). DraftKings responds by asking if she is gambling within her means (good!), and she says “Yes.” Then DraftKings gives her free money to bet with (not good!). Justifiably or not, this story will lead everyone to wonder how pervasive situations like this are. The industry should start getting ahead of this issue in a more serious way sooner rather than later.
Retail sports betting doesn’t always make sense
Before the fall of the federal sports betting ban, the typical American conjured up a vision of physical sportsbooks like the ones we see in Las Vegas. But we’re increasingly finding that model doesn’t work everywhere. Sometimes, it is flat-out a bad idea if executed poorly, especially in states that also have online sports betting. Recently:
A sportsbook in Connecticut is set to lose money in its first year of operation.
The Ohio Lottery posted a loss on kiosks around the state.
Stuff like this doesn’t mean the physical sportsbook is dead; just that “if you build it, they will come” isn’t a universal mantra. There are still plenty of retail sportsbooks that make money, even in online sports betting states. For what it’s worth, Penn Entertainment is rebranding its Detroit sportsbook as ESPN Bet.
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